The good news is that most dentists have established a successful dental practice with a significant portfolio of patients and a regular stream of income. In business terms, this means that the dental practice is a business that has market value. Unlike most other professional services firms, dental practices are regularly bought and sold. In fact, there are brokers who specialize in the valuation and sale of dental practices. Most dentists have built a successful practice which they can later sell in the open market. Successful dental practices in large centres such as Toronto can be worth the $500,000 and $5 million. This is no small number.
That was the good news.
The bad news is that the dental practice will be considered an asset that needs to be valued and equalized (shared) with your ex. Under Ontario Family Law, the value of the dental practice for the purposes of equalization is determined at the date of separation. For many dentists, their dental practice is their most significant asset. For dentists who are separating, there are only two options. The dentist can sell the practice and equalize the sale proceeds or the dentist can keep the practice and pay their spouse one-half of the value of the practice.
That was the bad news.
It should be noted that the equalization of assets is different than the obligation to pay spousal support. Although there is a crossover between the income from the dental practice and the valuation of the practice, Ontario Family Law treats these as two separate rights. That is, the dentist can both be required to pay spousal support and also be required to share the value of the dental practice.
If you are a dentist going through a divorce, make sure that you get sound legal advice on your rights and responsibilities.
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